Airline mergers and exits from Burma’s domestic aviation market are inevitable, according to a new report from the CAPA Centre for Aviation, which highlighted oversupply on both internal and international flights.

In an online preview of its new report “Myanmar Aviation Outlook: 2016,” the Sydney-based market intelligence firm said the country’s aviation market is “ripe for a shake-up, which should ultimately improve conditions and profitability.”

“Myanmar has huge potential but for at least the short term it faces monumental challenges,” it said.

Domestically, the report said, some 10 local airlines are now competing for a market of less than 3 million passengers.

“Mergers and exits are inevitable. The current situation, with several airlines competing on relatively small trunk routes, is unsustainable,” said CAPA. “The new government could pursue reforms that shake up Myanmar’s airline sector and improve profitability. However, change is hardly a certainty.”

The preview also touches on competition between the state-run Myanmar National Airlines, which only last year returned to the international scene, and Myanmar Airlines International, a spin-off of the national carrier that is run by Burmese conglomerate Kanbawza (KBZ) Group.

Both airlines are now flying the highly competitive routes between Rangoon and Singapore and Rangoon and Bangkok, and both are eyeing more expansion around the region. MNA has recently launched flights to Hong Kong, with the previous government declaring that it was comfortable making a loss on a venture it believed was necessary to restore the country’s international reputation.

CAPA suggested the new Aung San Suu Kyi-led government that took power in late March “may relook at the previous government’s decision to fund ambitious international expansion for MNA, which previously only operated domestic services.”

“A partnership or even merger between MNA and MAI would be sensible as the current situation seems unsustainable,” it added.

New Commerce Minister Targets Tripling of Exports

Burma’s new commerce minister reckons the country’s exports can triple in the government’s five-year term, identifying international markets as the key source of growth.

State media on Sunday reported comments from Than Myint, the National League for Democracy’s selection to head the Ministry of Commerce, during a meeting with exporters in Rangoon.

“Our country must strive for a threefold increase in its exports in five years,” he was quoted as saying by the Global New Light of Myanmar. He pointed to the example of nearby Vietnam, which “saw its export volumes increase fourfold in eight years,” he said.

Than Myint also decried the current reliance on neighboring countries for selling Burmese goods. He said he wants exporters to find markets further afield in Asia, as well as in the United States and Europe, the report said.

Burma has run high trade deficits in recent years, with exports largely consisting of products from natural resource extraction or agriculture. A report from Chinese state media last month, quoting the Commerce Ministry, valued Burma’s total exports for the 2015-16 fiscal year at $10.5 billion, compared with $15.8 billion in imports.

Few specific economic policies have been announced so far by the new government, and the new minister was apparently bombarded with complaints from exporters over issues ranging from the price of land to the country’s black market.

Without going into detail, the report cited Than Myint pledging to “cooperate with relevant organizations to shut down illegal trade as a national concern” and to “give capital and technology to private small and medium sided [sic] businesses.”

A former Ministry of Finance official, 72-year-old Than Myint has served as an economic advisor for the NLD since 2012.

His credentials came under scrutiny when he was nominated to serve in the new cabinet, however, as it emerged that a doctorate he claimed to have was from a school in Hawaii known to offer qualifications for money. Regardless, the minister was identified by the Global New Light of Myanmar as “Dr. Than Myint.”

New Telecoms Joint Venture Could Be Formed Next Month

The new joint venture that is set to become the fourth operator in Burma’s rapidly expanding mobile phone market is likely to be formed in May, according to a Vietnamese news report.

Citing information confirmed by Viettel—the Vietnamese military-owned telecommunications firm named by the government in March as the only qualified foreign bidder after a tender process—VN Express reported that negotiations on the new joint venture are expected to be completed next month.

Viettel is in talks with Star High Public Company, a consortium of local firms overseen by the Burmese military, to form the venture. “[T]he parties hope Myanmar’s government will grant a license in June,” VN Express said.

The joint venture—expected to invest about $1.5 billion to build its network—was approved in the last month of the outgoing previous government.

The report quoted the director of one of the public companies involved confirming that the new operator would have access to the military-owned Myanmar Economic Corporation’s network of CDMA phone masts that are currently used by a military-run phone provider under the name MecTel.

“We will have the admittance to the CDMA towers and would get the opportunity to take up the space. We will also work on a resource sharing with the towers operators already existing,” Zaw Min Oo, a director of consortium member Myanmar Technologies and Investment Corporation, told Deal Street Asia.

Telenor Reports 1.8m More Subscribers in First Quarter

Telenor’s growth in Burma remained almost steady in the first three months of 2016, with the Norwegian company now claiming 15.5 million subscribers, according to results published this week.

Telenor grew rapidly after launching in September 2014, putting on 3 million subscribers in the first quarter of 2015, for example. The firm has raced ahead of its private license-holding rival, Ooredoo, which now has 6.9 million customers in Burma.

Growth in subscriber numbers has slowed for Telenor, but appears to have steadied. Telenor put on an additional 1.8 million subscribers in the first quarter of this year, compared with 1.9 million subscribers added in the final quarter of last year.

Telenor also said it now has more than 5,000 towers across the country, adding 838 sites in the first quarter.

Qatar-based Ooredoo also reported new figures for quarter one this week. The company has brought in a new CEO, who has pledged to take a more mass-market tack in order to win more market share.

The company said it had more than doubled its subscriber base since the first quarter of 2015, when it had 3.4 million customers. But Ooredoo’s growth remains slower than Telenor’s—comparing the latest announcement with its subscriber figure announced at the end of 2015 shows that only about 1.1 million new subscribers were added in the first three months of this year.

The former monopoly holder, Myanma Posts and Telecommunications (MPT)—now run as a joint venture between the government and Japanese investors—claims more than 18 million subscribers.

American Interest in Burmese Coffee

Trade publication Roast Magazine says Burma is beginning to be seen as a potential source of specialty coffee for US buyers.

The publication’s Daily Coffee News website reported on an event held by the Specialty Coffee Association of America (SCAA) in Atlanta, Georgia, earlier this month, where Burmese coffee producers met with potential buyers.

The report said buyers in the competitive US market are “in constant search of new and exciting specialty coffees to present to their quality-concerned customers,” and therefore Burma “presents an enticing proposition.”

Efforts to build the infrastructure to export high-quality coffee from Burma were being closely watched, the report said, noting that the SCAA recently awarded 56 of 60 Burmese coffees at “specialty-grade” or above at a cupping competition.

The report pointed to projects by the Coffee Quality Institute and US nonprofit Winrock International that are providing funding and on-the-ground assistance to Burmese coffee farmers.

Also in attendance was the Myanmar Coffee Association’s chairman, Ye Mint. “We are sharing the knowledge and sharing the information with all of our people,” he told Daily Coffee News. “We start with following the good practices for the processing technology.”